Asia-Pacific logistics industry on track for double-digit growth

The transport and logistics services in Asia-Pacific are forecast to log double-digit increases over the next three years as a result of the rapid growth and integration of leading Asian economies, according to the latest report from research firm Transport Intelligence (TI).

“The dynamism and complexity of the Asia-Pacific transport and logistics market offer investors and operators the industry’s best prospects for growth and returns,” said TI in The Asia Pacific Transport and Logistics 2011, a report that provides an overview of the transport infrastructure in the main economies throughout the region.

While logistics companies in Europe and North America are coming to terms with a long-term weak economic environment, Asia offers many more opportunities, the report said. It identifies three key drivers of growth in the region:

The rapid development of the Chinese economy shows little sign of slowing, and its progression from low-cost manufacturing base to high- value production location is marking a new stage in its evolution. As labor costs rise in China, production is spilling over into neighboring, lower-cost markets. Both trends offer numerous opportunities to freight forwarders and contract logistics providers.

The integration of the leading Asian economies is proceeding fast, with free-trade agreements reducing barriers to international commerce. Logistics companies can increasingly view parts of the region as a “single market.”

Governments throughout the region are investing in numerous transport infrastructure projects as intra-regional trade increases, facilitating the provision of logistics services. Emerging countries such as Laos, Cambodia, and Sri Lanka have seen major boosts in their economies as the number of manufacturing operations increase and disposable income rises. Consequently, these countries are rapidly ramping up projects to build airports, roads, and rail networks to compete in the global economy.

“Although the region will remain an export leader for years to come, the growing intra-regional trade is creating an intricate supply chain particularly as China advances to more skilled manufacturing and lower-value production migrates to other Asian countries,” said Cathy Roberson, the report’s principal author. “Growth in contract logistics, express, and freight forwarding services is expected to maintain double-digit increases through 2014 with China and India leading the way.”